Apple prepares to pay out its scheduled quarterly dividends to qualifying shareholders Thursday, August 15th.
Each quarter Apple pays out a dividend to its ‘Shareholders of Record’ shortly over a month after the close of that specific fiscal quarter. A ‘Shareholder of Record’ is any shareholder currently holding stock at the time of payout. For this quarter, all new shareholders on record as of Wednesday’s close will receive their portion of the over $2.5 Billion in dividends reporting to release.
Today’s dividend is for the previous summer 2013 fiscal quarter and Apple intends to pay out at $3.05 per share to each of its holders as of Wednesday’s close. Yesterday’s close reported stock at $465.25 with a dividend yield of 2.62%. This is down from last payout which was reported at $2.8 billion as Apple increased the payout 15% to its current holders.
Although the company will pay out over $2.5 billion to current shareholders for the summer fiscal quarter, they stand to save $110 million due to recent actions to buy back and retire over 36 million shares in the previous quarter. Apple plans to continue its buyback plans over the upcoming two years with an estimated $44 billion allotted for the purpose of this program.
The reason behind the month and a half delay in dividend payouts is an accounting practice known in the investing world as the ‘ex-dividend’ or more familiar ‘reinvestment date’. This principle determines the new party owed instantly after a transaction has been made when shares change hands. This means the shareholder entitled to the dividend is recorded immediately, while the transaction does not settle for an additional three days.
Apple shareholders benefit from this regular quarterly dividend in addition to any continued appreciation of stock and can expect the payout program to continue in the future. Apple’s continued buyback efforts will increase the scarcity of such stock in the hopes of further increasing share value. The increase in value is intended to offset NASDAQ’s automatic adjustments to a company’s value as dividend payouts come directly from Apple’s cash holdings.
The company has the support and motivation stemming from many of its main shareholders to continue the buybacks into the future to increase stock price, which is currently at $465.25 a share. Key shareholders such as billionaire investor Carl Icahn have stated that Apple shares are not currently reflecting the company’s value. The program’s purpose is to see a much-needed turn around.
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